John Hathaway, senior managing director at Tocqueville Asset Management, has outlined a number of reasons today (November 7th) why he believes gold is about to embark on a bull run.
He admitted in a recent report that he has been exasperated by the lack of increase in the gold price of late, asking "what will it take?" if the current "horrific financial market developments" have not provided a boost.
However, he has now explained in an interview with the International Herald Tribune that higher inflation, a weaker US dollar and possibly even the downgrading of Treasury debt could be on the cards.
"Gold trading steadily at $2,500 is not unthinkable," he told the newspaper.
Another major factor which contributes to Mr. Hathaway's view is that he believes there is a significant supply shortage in gold, which is being caused by the widespread placing of paper equivalents on the market.
His sentiments have been echoed by Vahid Fathi, a commodities industry analyst for research firm Morningstar, who believes that gold should form between three and five per cent of an investment portfolio.
He told the newspaper that declines in the supply of "oil, copper, cement, everything used to extract gold from the ground are not discounted in the marketplace".
"As we begin to see margin improvement, we will see significant room for upward movement," he added.
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